Green electricity providers

In the previous two posts, we have discussed the merits of using solar panels and micro wind turbines to cut your carbon footprint. Even though a large number of opportunities for the deployment of these technologies were identified, the prognosis for these two small-scale solutions was not all that good.

wind turbine sizeAn important part of the reason for this is that these solutions cannot benefit from economies of scale. As an example, building and maintaining one giant 5 MW wind turbine would be a lot cheaper than building and maintaining 2000 fairly large 2.5 kW ground-mounted micro wind turbines. At current market prices, the 5 MW turbine would cost you about $9 million fully installed, while the 2.5 kW turbine would cost you about $19000. This makes the 5 MW turbine fully 4 times cheaper than the 2.5 kW turbines.

For solar power, the difference is usually less extreme due to the modular nature of solar panels. In the US, industrial scale solar power installations are about two times less expensive per kW than rooftop solar (below). But there is another important factor: utilisation of the installed capacity. Utility scale solar is normally installed only in the best locations and is often equipped with tracking systems to ensure they are always pointing towards the sun. This ensures that one can generally get about 50% more electricity from a given capacity of utility scale solar than from the same capacity of rooftop solar.

US solar costs

The good thing about a green electricity provider is that economies of scale are efficiently utilised, especially when it comes to onshore wind. Behind hydropower, utility scale onshore wind is the most economically viable renewable energy source at present and, as long as the amount of wind energy in a system remains below about 5% and wind farms are actually built in windy locations, wind power is a fairly economical source of clean energy.

Most green energy providers will have onshore wind as a major component of their portfolios, thus making this a good option to cut your carbon footprint. However, if these providers claim that they can offer prices which are similar or even lower than standard electricity rates, it is a clear sign that some significant subsidization and wealth transfers are going on behind the scenes.

In addition, if the wind penetration in your area is already above 5%, the substantial costs related to the intermittent output of wind power is probably already being socialized unfairly across the population. Currently, only the European nations of Denmark, Portugal, Ireland, Spain, Germany, Greece and the UK have more than 5% wind power on their grids, thus leaving a lot of deployment opportunity throughout the word.

This implies that there are still many regions where onshore wind power can be profitably developed and sold to environmentally conscious people. This can either be done through a direct green electricity provider that builds and operates wind farms using the proceeds from electricity sales or through green pricing programs offered by standard utilities that include onshore wind farms and/or industrial scale solar in their portfolios. As long as the regional penetration of these intermittent sources of electricity remain below about 5%, these are generally good options to reduce your carbon footprint.

Filed under: Consumption patters – The green economy

One thought on “Green electricity providers”

  1. I read an 2012 article saying large wind turbines cost about $1.23 per MW, but considering current US Power Purchase Agreements are going for as less as $25 per mWh for wind energy, I think that they must be a bit less than that now.

    Am having a difficult time finding actual 5mw turbine costs, the industry seem to like to keep it secret.

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